[Stoves] Affordability perceptions

David Meed dbmeed at gmail.com
Wed Jan 15 07:49:38 CST 2020


On Tue, Jan 14, 2020 at 8:51 PM Paul Arveson <
outlook_32A675455D056F09 at outlook.com> wrote:

> While in Ghana in 2015 I was told (by Ellen Seldenhuis) that in rural
> Ghana, per capita income is about 2 cedis per day, or 50c US per day.
>
>I translated prices to get a feel for the perceptions in rural Ghana:



>Perception in US                               Perception in Ghana
                    How Many Days work?

Free       Free                       Free       Free

1c            Incidental                            $2.74     Incidental


10c         Incidental                            $27         OK if needed
                             1/5 day

$1           Incidental                            $274       Needs
financing                            2 days

$10         OK if needed     $2740    Needs financing
                    20 days

$20         OK if needed     $5480    Needs financing
                    40 days

$50         OK if needed     $13,700                 Very difficult
                          100 days (over 1/3 of the year)

$100       OK if needed     $27,400                 Very difficult
                         200 days (almost 2/3 of the year)

$300       OK if needed     $82,200                 Out of the question
                       600 days (almost 2 years)

> [snip]etc.

This is an excellent point.  Something I like to think about in relation to
affordability is "how many days work."  In other words - how many days at
an average wage would I have to work to purchase something.  And then we
get into the agricultural model where I may only receive income when I sell
my crop - so I don't have ANY income for most of the year and then I have
to save any cash I get to last me until the next crop comes in.

Adding a "days" column puts it in real terms that  I can translate back to
my own life - that $100 price point that looks like a very low amount to me
can represent almost 8 months income in rural Ghana.  8 months of my own
income is $...

David Meed







>
>
> Could this be right?  I checked; an official Ghana report from 2008 stated:
>
> "Average annual household income in Ghana is about GH¢1,217.00 whilst the
> average per capita income is almost GH¢400. With an average exchange rate
> of GH¢0.92 (¢9,176.48) to the US dollar prevailing in June 2006, the
> average annual household income is US$1,327 and the average per capita
> income is US$433 (Section 9.8). There are regional differences with Greater
> Accra region recording the highest of GH¢544.00 whilst Upper West and Upper
> East regions had less than GH¢130.00. Urban localities had higher per
> capita income than rural localities."
>
> http://www.statsghana.gov.gh/docfiles/glss5_report.pdf  [link no longer
> exists].
>
>
>
> The 2015 exchange rate was 3.7 cedis per US dollar, down from .92 cedis
> per dollar.   Ghana was then experiencing about 40% inflation, but it is
> now down to about 8%.
>
>
>
> Taking the average per capita income number quoted, and adjusting to the
> exchange rate, gives about $1 US per day per capita income.  This is
> averaged over the whole country, whereas Ellen was probably giving a value
> in the rural part of the country where she lives.  So for this region,
> Ellen is right.
>
>
>
> This difference in incomes is breathtaking.
>
>
>
> The average purchasing power per day per capita in the US is around $137
> (or $50,000 per year) -- about 274 times the 50c/day income in rural
> Ghana.  No wonder Americans cannot relate to this level of poverty.
>
>
>
> To help understand this, I arranged prices in a scale of psychologically
> perceived costs as follows:
>
>
>
> Level:
>
> 1 - Free, with no hidden costs
>
> 2 - Incidental; no significant impact on bank account; no need to budget
>
> 3 - OK if it is needed and fits within budget; no financing needed
>
> 4 – Needs financing - significant expense but can be financed over time
>
> 5 – Very difficult - even with financing, would be a painful sacrifice to
> our lifestyle
>
> 6 - Out of the question; irrelevant to us
>
>
>
> I translated prices to get a feel for the perceptions in rural Ghana:
>
>
>
> Perception in US                               Perception in Ghana
>
> Free       Free                       Free       Free
>
> 1c            Incidental                            $2.74     Incidental
>
> 10c         Incidental                            $27         OK if needed
>
> $1           Incidental                            $274       Needs
> financing
>
> $10         OK if needed     $2740    Needs financing
>
> $20         OK if needed     $5480    Needs financing
>
> $50         OK if needed     $13,700                 Very difficult
>
> $100       OK if needed     $27,400                 Very difficult
>
> $300       OK if needed     $82,200                 Out of the question
>
> $1000    Needs financing $274,000              Out of the question
>
> $3000    Needs financing $822,000              Out of the question
>
> $10,000                 Needs financing $2,740,000           Out of the
> question
>
> $100,000              Very difficult      $27,400,000        Out of the
> question
>
>
>
> For instance, a dinner entree in a Chinese restaurant in Accra cost me 30
> cedis.  This is equivalent to about $7.50 US.  In rural Ghana it is
> psychologically equivalent to about $2000.
>
>
>
> I think this difference in perceptions is one of the reasons why some of
> the products being promoted for developing countries will never be
> accepted.   It also explains why people seek to obtain fuel for free, even
> if it requires using their own hard labor, rather than pay anything for
> it.   "Free" means the same thing in both cultures.
>
>
>
> It is true that people in poor countries are often are accused of being
> unwilling to change and adapt to the new products that the developed world
> wants to provide.  However, I think the affordability perceptions are so
> out of alignment that this amounts to blaming the victim.  (Affordability
> is not within the scope of the ISO cookstove standard being developed, but
> it is implicit in the context of the sponsors to focus on the cooking needs
> of the developing world.)
>
>
>
> In light of this situation, I am interested in getting fuel cost data to
> estimate affordability in other places.  If you have references, please let
> me know.
>
>
>
> Thanks,
>
>
>
> Paul Arveson
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